The Prime Minister, Theresa May, must address the practices of “unscrupulous business” if she is to make good on her promise to close the gap between the haves and have-nots, Oxfam has warned.
The international charity said the richest 1 per cent owned 20 times more than the poorest 20 per cent, and if action was not taken to cut inequality nearly 400,000 more households could be living in poverty by 2030.
Oxfam called on Mrs May to use her speech at the Conservative party conference next month to set out how she would tackle “bad behaviour by business and making the economy work for everyone”.
The head of Oxfam’s UK programme, Rachael Orr (pictured), said last week: “Oxfam welcomes the fact Theresa May is embracing this agenda. Addressing the practises of unscrupulous business needs to be a central part of the Government’s plans to even up the economy. That means closing wage gaps, incentivising investment in companies’ staff and making sure they pay their fair share of taxes”.
The Prime Minister’s press office declined to comment.
Ms Orr said employers could play a key role in helping to ensure work could be a viable route out of poverty by paying a living wage, honouring workers’ rights, and not using exploitative zero-hours contracts.
“At the same time the Government needs to hold their (businesses) feet to the fire,” she said.
A spokesman for the Confederation of British Industry (CBI) – representing 190,000 businesses – told Chief-Exec.com that increasing productivity, especially outside London and the south-east, was the route to prosperity.
“Productivity raises people out of poverty, pays for public services, and creates opportunities for our young people,” he said on Tuesday.
Businesses played their part by creating jobs and apprenticeships and liaising with schools and universities to help prepare young people for work. In-work training also provided opportunities for progression.
“Shaping devolution to promote economic growth across all UK regions and nations is now more important than ever following the EU Referendum outcome,” the CBI spokesman said.
Oxfam issued a four point plan for government and businesses that includes:
- Delivering on Mrs May’s pledge to give a greater voice to employees through greater representation on company boards
- Offering employers incentives to up-skill low-skilled jobs and low-skilled workers to ensure more people could access decent work
- Addressing pay disparities through the adoption of pay ratios and curbing excessive pay at the top
- Tackling corporate tax avoidance and putting an end to tax havens
A briefing note to journalists entitled How to Close Great Britain’s Great Divide: the business of tackling inequality said corporate structures must ensure that stakeholders other than shareholders and senior managers hold greater power. Employee-owned businesses such as John Lewis ensured that prosperity and profits were shared more broadly.
If structural changes reached beyond the boardroom, employers and the government would have a real opportunity to ensure all employees share in the profits and successes of big business.
“Employers must ensure work is the viable route out of poverty it should be, creating decent jobs that pay a living wage, honour workers’ rights and don’t use exploitative zero-hours contracts,” the briefing note said.
“Government recognition for employers offering ‘decent work’ needs to go hand in hand with incentives for businesses to invest in their staff to help them progress. … Training opportunities should emphasise transferable skills to ensure employees can better utilise skills within other sectors.
“This would also act to address the productivity challenges facing the UK economy to which the skills gap contributes. Businesses should also consider how both they and their staff can benefit from offering flexible work to those with caring responsibilities, predominantly women.”
By Aban Contractor